New York Hospital Medical Center v. Microtech Contracting Corp.
New York Hospital Medical Center v. Microtech Contracting Corp.
Opinion of the Court
OPINION OF THE COURT
In Balbuena v IDR Realty LLC (6 NY3d 338, 363 [2006]), we held that an injured employee’s status as an undocumented alien does not preclude recovery of lost wages in a personal injury action against a landowner under the State’s Labor Law. This appeal asks us to look at the other side of the coin and decide if an employer’s statutory rights under the Workers’ Compensation Law are extinguished merely because its injured employee is an undocumented alien; specifically, whether the employer may still invoke section ll’s shield against third-party claims for common-law contribution and indemnification. We conclude that, under the facts and circumstances presented by this case, the employees’ immigration status does not affect the employer’s rights under Workers’ Compensation Law § 11, and therefore affirm the Appellate Division.
I
In early 2008, plaintiff New York Hospital Medical Center (the hospital) engaged defendant Microtech Contracting (Micro-tech) to undertake demolition in a basement room housing an incinerator at the hospital’s location in Flushing, Queens. On March 6, 2008, a Microtech “supervisor” met with brothers Luis and Gerardo Lema, and hired them to perform this work. The Lemas, originally from Ecuador, were undocumented aliens not legally employable in the United States.
After the men reached the worksite, the Microtech employee supplied the Lemas with a sledge hammer and a chipping gun (essentially a small jackhammer) and explained what they were supposed to do. The Lemas first broke apart and removed a cement platform and then began taking down a metal wall. The vibrations created by use of the tools given them evidently dislodged a metal chimney or flue attached to the wall between 11 and 20 feet above the floor. The chimney toppled, and struck and injured them both.
Meanwhile, by summons and complaint dated September 20, 2010, the hospital brought this action for common-law and contractual contribution and indemnification against Microtech to recover any damages it incurred in the Labor Law litigation with the Lemas. The hospital alleged that Microtech was performing the work on March 6, 2008 pursuant to an agreement and/or contract with it; that Microtech breached this contract and/or agreement and violated the Immigration Reform and Control Act (8 USC § 1324a) (IRCA) when it hired the Le-mas;
Solely for purposes of responding to Microtech’s motion, the hospital did not argue that the Lemas suffered grave injuries or that Microtech had agreed in writing to contribution or indemnification. Moreover, the hospital stressed that its claim did not affect the relationship between Microtech and its employees, the Lemas. The hospital insisted, however, that Micro-tech should not be allowed to “hid[e] behind the language of
On August 15, 2011, Supreme Court granted Microtech’s motion to dismiss on the ground that the complaint did not state a cause of action. The judge reasoned that “[t]he exceptions to [section ll’s] bar of claims for indemnity and contribution (against an employer providing Workers’ Compensation benefits such as Microtech) do not include the circumstance accepted as true herein for purposes of this motion—essentially, that Micro-tech employed unauthorized aliens who were injured on the job.” (2011 NY Slip Op 33671[U], *3-4 [2011].) The hospital appealed.
In the Appellate Division, the hospital again protested that Microtech may not “profit” from its violation of IRCA. Additionally, the hospital more clearly argued conflict preemption—i.e., that permitting an employer who knowingly hires undocumented workers to enjoy the tort immunity conferred by section 11 conflicts with IRCA’s goal to discourage illegal immigration by decreasing employment opportunities for undocumented workers. Microtech made three responses. First, Micro-tech argued that section 11 barred the hospital’s claim, as stated by Supreme Court. Next, Microtech countered that whereas hiring an undocumented worker knowingly or without verifying employment eligibility is unlawful and exposes an employer to penalties under IRCA, this circumstance does not make IRCA “conflict [with], contradict or supersede” New York’s Workers’ Compensation Law. According to Microtech, since it is well settled that the Workers’ Compensation Law applies to undocumented aliens,
The Appellate Division unanimously affirmed (98 AD3d 1096 [2d Dept 2012]). Citing repeatedly to Balbuena, the court acknowledged that “precluding [Microtech] from receiving the protections provided by Workers’ Compensation Law § 11 for its violations of the IRCA [might] support [that statute’s] ultimate goals ... by punishing [Microtech] for failing to verify the [Le-mas’] immigration status” (id. at 1100). Nonetheless, the court opined, “affording [Microtech] the economic protections of Workers’ Compensation Law § 11 . . . would not stand as an obstacle to the accomplishment or execution of the full purposes and objectives of Congress such that Workers’ Compensation Law § 11 should be considered preempted” (id. [internal quotation marks omitted]). Further, to rule in the hospital’s favor would “effectively deny [Microtech] the economic protections it acquired under the Workers’ Compensation Law in return for providing [the Lemas] with compensation for their injuries,” as well as “relieve [the hospital] of its responsibility to ensure a safe construction site for workers under the Labor Law” (id.). Accordingly, the Appellate Division held that the IRCA violations alleged did not abrogate the protection from third-party claims afforded to Microtech by section 11. By decision and order dated March 13, 2013, the Appellate Division denied the hospital’s motion to reargue, and instead granted leave to appeal to us and certified the following question, “Was the decision and order of [the Appellate Division] properly made?”
II
In the lower courts the parties contested whether IRCA preempts section ll’s shield against third-party claims for common-law contribution and indemnification, and the Appellate Division’s decision turned on its disposition of this issue. Before us, however, the hospital has chosen not to assert conflict preemption. Rather, as stated in its brief,
*509 “the Hospital argues only that the employment contracts between Microtech and the Lemas were illegal contracts that are unenforceable in New York Courts. Thus, Microtech may not defend this case on the ground that the Lemas were its employees and therefore the action is barred by section 11 of the WCL. Microtech violated federal law when it hired the Lemas without asking for any documentation showing they were authorized to work in the United States.”5
It is true that New York courts typically do not assist parties in taking advantage of their own wrongs (see e.g. Manning v Brown, 91 NY2d 116 [1997]; Riggs v Palmer, 115 NY 506, 511 [1889]), or enforce illegal contracts (Spivak v Sachs, 16 NY2d 163 [1965]; Stone v Freeman, 298 NY 268 [1948]). But these principles are beside the point in this case: we are not being called upon to enforce or recognize rights arising from an illegal oral employment contract between Microtech and the Lemas, and Microtech is not raising any such employment contract as a defense to common-law contribution or indemnification. Indeed, section 11 does not even require an underlying employment contract (see Workers’ Compensation Law § 201 [in defining the terms “employee” and “employment” for the purposes of the Workers’ Compensation Law, the existence of a contract is not a requirement]). Instead, we are being asked to apply the statute to the facts presented.
In any event, we essentially rejected the hospital’s argument in Balbuena, where the dissent (citing many of the same cases relied upon by the hospital) would have denied recovery to the plaintiffs in their state Labor Law lawsuits on the ground that “the courts will not aid in achieving the purpose of an illegal transaction” (Balbuena, 6 NY3d at 363, 363-368 [Smith, J., dissenting]). If the illegality of the employment contract does not defeat the employee’s rights under an otherwise applicable state statute, as was the case in Balbuena, it is not clear why it would nonetheless annul the employer’s statutory rights.
Under New York’s workers’ compensation scheme, an employee receives medical benefits and compensation for workplace injuries, regardless of fault, paid for by the employer. In
Accordingly, the order of the Appellate Division should be affirmed, with costs, and the certified question not answered upon the ground that it is unnecessary.
Order affirmed, with costs, and certified question not answered upon the ground that it is unnecessary.
. IRCA makes it unlawful for a person or entity to hire an unauthorized alien for employment in the United States, either knowingly or without complying with the statute’s verification requirements (see 8 USC § 1324a [a] [1] [A], [B]; see generally Balbuena, 6 NY3d at 353-354).
. Specifically, section 11 states that
“[t]he liability of an employer [to pay workers’ compensation benefits] shall be exclusive and in place of any other liability whatsoever, to such employee, his or her personal representatives, spouse, parents, dependents, distributees, or any person otherwise entitled to recover damages, contribution or indemnity, at common law or otherwise, on account of such injury or death or liability arising therefrom ....
*506 “For purposes of this section the terms ‘indemnity’ and ‘contribution’ shall not include a claim or cause of action for contribution or indemnification based upon a provision in a written contract entered into prior to the accident or occurrence by which the employer had expressly agreed to contribution to or indemnification of the claimant or person asserting the cause of action for the type of loss suffered.
“An employer shall not be liable for contribution or indemnity to any third person based upon liability for injuries sustained by an employee acting within the scope of his or her employment for such employer unless such third person proves through competent medical evidence that such employee has sustained a ‘grave injury’ which shall mean only one or more of the following: death, permanent and total loss of use or amputation of an arm, leg, hand or foot, loss of multiple fingers, loss of multiple toes, paraplegia or quadriplegia, total and permanent blindness, total and permanent deafness, loss of nose, loss of ear, permanent and severe facial disfigurement, loss of an index finger or an acquired injury to the brain caused by an external physical force resulting in permanent total disability.”
. Microtech conceded receipt of this purchase order solely for purposes of its motion to dismiss.
. We have actually never addressed the precise question of whether, or under what circumstances, IRCA may preempt the Workers’ Compensation Law. Balbuena dealt with alleged violations of the State’s Labor Law. In support of our holding in Balbuena, we simply noted that courts in other states have held workers’ compensation statutes, which like the State’s Labor Law are intended to protect workers, to be “applicable to all persons within the state’s borders, even those who are not entitled to be here” (Balbuena, 6 NY3d at 359 n 6). In Matter of Ramroop v Flexo-Craft Print., Inc. (11 NY3d 160 [2008]), as in this case, the parties did not dispute that an injured employee was entitled to workers’ compensation benefits. As a result, the only issue before us in Ramroop was whether the employee’s status as an undocumented worker prevented him from recovering “additional compensation” pursuant to Workers’ Compensation Law § 15 (3) (v), and we held that it did.
. In its reply brief, the hospital reemphasizes its stance that “because Microtech violated federal law when it hired the Lema brothers, the employment contract between Microtech and the Lemas cannot be enforced in Court and thus Microtech may not raise it as a defense to the hospital’s action for indemnification and/or contribution.”
Reference
- Full Case Name
- New York Hospital Medical Center of Queens v. Microtech Contracting Corp.
- Cited By
- 11 cases
- Status
- Published